The HTML5 spec for video doesn't require any specific codec, and the tag allows you to include multiple versions of a video, which the browser can flip through to find one that it can play. This just means an extra encoding step for web content creators who had previously been happy just creating an Ogg Theora file (Firefox) and an H.264 mpeg file (most others), or working with JavaScript to detect what the browser can handle and falling back to Flash Player as needed (which can also play H.264 video). Update: As commenters point out, Firefox can already handle VP8-encoded video and Chrome can handle Ogg, so actually content creators could in theory stick with only two encoding standards and still be OK. Both Opera and Chromium (the open-source version of Chrome) also include VP8 codec support, while Safari and IE do not.

While the majority of web video is already encoded as H.264, instead of proprietary formats like Flash, there is a fairly large elephant in the room when it comes to content. If Google's subsidiary YouTube (and other sites that serve large amounts of video to mobile phones) makes a move to WebM, Apple is going to have to make some tough decisions about the codecs supported in iOS devices. Unfortunately for Apple and most other mobile device manufacturers, H.264 playback is already implemented in hardware (for speed and battery savings); WebM is not yet, even on Android devices.

The debate is, ostensibly, about free versus patent-limited approaches to video (despite Google's effort to portray this as a move toward openness, there's been no indication that Chrome will be dropping the included proprietary/closed Flash Player as well). One could also point out that despite Google's move to open up VP8 and WebM, it's not at all clear that the codec truly is unencumbered by patents; H.264 is also an ISO standard format, while WebM is not.

With Internet Explorer, Microsoft has chosen to support only H.264 in the latest version of the browser (although, in theory, a downloadable codec would allow it to play WebM as well). No question, the "format war" is still on, but the major players could decide the fate of video codecs pretty quickly. It will be interesting to see how this pans out for Apple's customers.